Appellate authority may admit belated s.80JJAA deduction when return processed under s.143(1) and no revised return chance

ITAT (Kolkata - AT) allowed an appellant's belated claim for deduction under s.80JJAA raised at first appeal, holding that where the return was processed under s.143(1) by CPC and no opportunity existed to file a revised return, the appellate authority may admit and decide the claim. The Tribunal distinguished recent SC authority as inapplicable and relied on precedent permitting appellate admission of claims not made before the AO. The additional ground for s.80JJAA deduction was admitted and allowed.

---

---

Issues Involved:
1. Disallowance of claim made under Section 80JJAA of the Income-tax Act, 1961.
2. Admission of additional grounds of appeal at the appellate stage.

Issue-Wise Detailed Analysis:

1. Disallowance of Claim Made Under Section 80JJAA:
The primary issue in this appeal pertains to the disallowance of the claim made by the assessee under Section 80JJAA of the Income-tax Act, 1961. The assessee contended that the claim for deduction was disallowed because it was not included in the return of income filed. However, during the appellate proceedings, the assessee raised this claim as an additional ground, citing the decision of the Hon'ble Delhi High Court in International Tractors Ltd. Vs. DCIT 435 ITR 85 (Del.) and the Karnataka High Court in Texus Instruments India Pvt. Ltd. 435 ITR 1 (Kar.), which support the claim's admissibility.

The assessee argued that it incurred employee benefit expenses amounting to Rs. 24,77,20,581, which was an increase from the previous year's expenses, making it eligible for a deduction of Rs. 61,64,176 under Section 80JJAA. The assessee supported its contention with several judgments, including Jute Corporation of India Ltd. Vs. CIT (1991) 187 ITR 688 (SC) and National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC), to assert that appellate authorities can entertain new claims not made in the original return.

2. Admission of Additional Grounds of Appeal:
The assessee filed additional grounds for the deduction claim at the first appellate stage, arguing that the appellate authorities have the jurisdiction to admit such claims, even if not made before the Assessing Officer (AO). The CIT(A) rejected the additional ground on the basis that the judgments cited by the assessee pertained to orders under Section 143(3) and not to intimation under Section 143(1).

The Tribunal considered the arguments and noted that the Hon'ble Supreme Court in Goetz (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC) held that while the AO cannot entertain new claims other than by revised return, appellate authorities can admit such claims. The Tribunal also referred to the decision of the Hon'ble High Court of Karnataka in PCIT Vs. Karnataka State Cooperative Federation Ltd., which upheld the power of appellate authorities to entertain claims not made in the original return or revised return.

The Tribunal further distinguished the decision of the Hon'ble Supreme Court in PCIT Vs. Wipro Ltd., noting that the distinction made between claims under Chapter-III and Chapter-VIA of the Act does not apply to the present case, as the claim under Section 80JJAA falls under Chapter-VIA.

The Tribunal observed that the assessee had been allowed similar deductions for the preceding and subsequent assessment years (AYs 2018-19 and 2020-21) by the CIT(A). The Tribunal concluded that the claim made by the assessee at the first appellate stage is allowable based on judicial precedents and the facts of the case.

Conclusion:
The Tribunal allowed the appeal of the assessee, admitting the additional ground for the claim of deduction under Section 80JJAA. The Tribunal emphasized the jurisdiction of appellate authorities to entertain new claims not made in the original return, supported by relevant judicial precedents. The order was pronounced on 1st February 2023, allowing the appeal in favor of the assessee.

---